12 August, 2020

Ukraine’s PrivatBank available to settlement with former owners

KIEV (Reuters) – Ukraine's biggest bank would not leave out settling a lawful dispute featuring a former main shareholders away from court, your head of PrivatBank's supervisory board said on Tuesday.

The Ukrainian authorities took PrivatBank into state hands in December 2019 and also have spent nearly $6 billion so far to plug a hole in their balance sheet due to the government says were fraudulent lending practices and money-laundering.

The former owners, a couple of Ukraine's richest men, dispute the authorities' assessment of your bank's health in the event it was nationalized. True triggered hundreds of lawsuits along with the authorities see it as a test of their combat corruption.

An investigation commissioned by way of the central bank in January found 95 percent of PrivatBank's corporate loans had opted to companies of this particular former owners or their affiliates. For that reason, much more than Eighty five percent of that portfolio is comprised of non-performing loans adjusted June 1, the central bank says.

Engin Akchakocha, head on the PrivatBank's supervisory board, said "every choices around the table" when asked if he had consider an out-of-court settlement together with the bank's former main shareholders, although he explained he wouldn’t need to comment upon the legal cases.

"Resolving an issue peacefully is simpler greater than wanting to resolve it by using a fight," he said.

"It all needs appropriate willpower and goodwill," he explained when asked about the odds of the first sort owners helping tackle PrivatBank's bad loans.

"To date, and also a in communication while using former shareholders of the bank on resolving these complaints for a voluntary basis," he explained, but he added that they did not eliminate this sort of route.

Lawyers for Ihor Kolomoisky and Gennadiy Bogolyubov, each former main shareholders, could not immediately be reached for comment.

PREPARING FOR SALE

Akchakocha was appointed chairman in the supervisory board in January 2019, we have spent as chief banking regulator in Turkey during its economic crisis in 2001.

Under his guidance, PrivatBank aims revisit profit in 2018 after eighteen months of losses in order to choose a buyer by 2022.

The bank's strategy includes focusing mostly on retail banking and making only limited forays into corporate lending, said Akchakocha, adding that PrivatBank had implemented numerous changes for your governance since nationalization.

The supervisory board "started to modify the bank's technique of working, expertise in risk, and implementing controls," he was quoted saying, adding this included re-establishing a danger management unit, an interior audit department as well as a compliance office.

PrivatBank's non-performing loans had to be removed from its balance sheet for a successful privatization, he was quoted saying, adding the lending company may wish to be break up so it will be attractive for any sale due to its size.

The bank had assets of 254.6 billion hryvnias ($9.7 billion) at the time of end-March 2018.

Asked if foreign finance companies may be shareholders before the full privatization, he was quoted saying: "After we feel that it will eventually improve the valuation on the ultimate transaction, it is usually an option."

But he stated it was actually still early to take into consideration any investors.

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